Assessing Market Action With Indicators And History
Tuesday, August 26, 2008
Bad Breadth & Volume Make Good Combo
Extremely negative breadth and extremely low volume is an unusual combination. On Monday we saw this combination. Below is a quick study which looks at it:
Not a huge edge, but it appears to suggest we should see a respite and a bounce sometime soon.
It's your blog and I very much appreciate your work, but why volume as a breadth measure? Volume on any given day can be dominated by a few large names (GE earnings miss, FNM collapse/rebound, etc)
In this blog I will be examining market action and quantifying my findings. Using sentiment, breadth, price and volume indicators - both standard and customized - I will try and uncover short-term edges which could be taken advantage of by market participants. I will frequently add opinion to these studies and may sometimes post opinions without quantifiable research behind them.
All content on this site is provided for informational purposes only. It is NOT a recommendation or advice to buy or sell any securities. I may hold positions for myself or clients in the securities or industries mentioned here. There is a very high degree of risk involved in trading securities. Your use of any information on this site is entirely at your own risk.
I have traded professionally since 2001. From January 2003 through February 2007 my bi-weekly column "Rob Hanna's Putting It All Together" appeared on TradingMarkets.com. I have been conducting quantitative research and designing trading systems - mostly focused on short-term edges since 2004.
3 comments:
How do you quantify "worst breadth"? What are you using to measure breadth?
Good question. Poor ommission on my part. I was using NYSE up volume%. (Up volume / total volume)
Rob
It's your blog and I very much appreciate your work, but why volume as a breadth measure? Volume on any given day can be dominated by a few large names (GE earnings miss, FNM collapse/rebound, etc)
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